Sunglasses Stores
The Sunglasses Stores industry has grown over the five years to 2020. Consumers continue to rely on the expertise and vast product selection of industry operators. Moreover, rising disposable income amid improving economic conditions has boosted demand for luxury sunglasses, which command a higher p...
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| Format: | Market Research |
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| Language: | eng |
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| Summary: | The Sunglasses Stores industry has grown over the five years to 2020. Consumers continue to rely on the expertise and vast product selection of industry operators. Moreover, rising disposable income amid improving economic conditions has boosted demand for luxury sunglasses, which command a higher price. Industry revenue is anticipated to grow an annualized 0.7% to $1.9 billion over the five years to 2020. While demand is on the rise, online retailers have lured a growing number of consumers with competitive prices and convenience, slowing growth and eroding market share of the industry's largest players. In 2020 alone, industry revenue is anticipated to decline 7.6% due to temporary store closures and economic slowdowns caused by the COVID-19 (coronavirus) pandemic.
Major player Luxottica Group SpA (Luxottica) dominates the Sunglasses Stores industry with its popular Sunglass Hut and Oakley retail stores. In 2020, Luxottica is anticipated to account for 69.4% of the industry revenue while the industry's previous second-largest player, Safilo Group SpA (Safilo), exited the industry in 2019. Both companies are vertically integrated and manufacture their own sunglasses, enabling them to control costs and competitively price their products while maintaining favorable returns. Nonetheless, both companies have lost market share during the period, resulting in a decrease in industry consolidation. Safilo, in particular, struggled with store closures and declining traffic in its retail stores, likely a result of increased competition with e-commerce retailers, pushing it to sell its retail operations. Even so, the average industry profit margin, measured as earnings before interest and taxes, has remain strong over the five years to 2020, accounting for 5.4% of revenue in 2020.
Heightened competition from online retailers is expected to further limit consumer demand for sunglasses from brick-and-mortar retail stores over the five years to 2025. While many designers have opted to license their brands through optical manufacturing behemoths, such as Luxottica, a growing number of online start-ups are designing and manufacturing their own sunglasses. Since they do not maintain brick-and-mortar stores, overhead costs are considerably lower for online retailers. Still, as the economy and industry recover from the coronavirus pandemic, industry revenue is expected to grow at an annualized rate of 2.4% to $2.1 billion over the five years to 2025. |
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